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Exploring developments in Ireland's regional rental markets

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  • McCann, Fergal

    (Central Bank of Ireland)

Abstract

The Irish rental market has been characterised by rapid price growth in recent years, particularly in urban areas. This growth has occurred at the same time as the lowest levels of supply since 2006 in many areas. In this Letter I present a model in which rents across eight Irish regions between 2006Q1 and 2016Q1 are explained by local employment rates, population, house prices, rental supply and an estimate of the vacancy rate. High unemployment, higher numbers of properties supplied and higher vacancy rates are all associated with lower rents, while higher house prices and a larger population are both associated with higher rents. These effects are robust to modelling in levels and lagged growth rates. finally, I provide estimates of misalignment of rental markets using model residuals, with a focus on the period surrounding the recent introduction of macroprudential mortgage market regulations by the Central Bank of Ireland.

Suggested Citation

  • McCann, Fergal, 2016. "Exploring developments in Ireland's regional rental markets," Economic Letters 13/EL/16, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:13/el/16
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    File URL: https://centralbank.ie/docs/default-source/publications/economic-letters/economic-letter-vol-2016-no-13.pdf?sfvrsn=6
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    References listed on IDEAS

    as
    1. Kennedy, Gerard & Sheenan, Lisa & Woods, Maria, 2016. "Modelling Irish Rents: Recent Developments in Historical Context," Economic Letters 14/EL/16, Central Bank of Ireland.
    2. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    3. Joshua Gallin, 2008. "The Long‐Run Relationship Between House Prices and Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(4), pages 635-658, December.
    4. Kelly, Connor & McCann, Fergal, 2016. "Rental markets, savings and the accumulation of mortgage deposits," Quarterly Bulletin Articles, Central Bank of Ireland, pages 56-70, October.
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    Cited by:

    1. Kennedy, Gerard & Sheenan, Lisa & Woods, Maria, 2016. "Modelling Irish Rents: Recent Developments in Historical Context," Economic Letters 14/EL/16, Central Bank of Ireland.
    2. Allen-Coghlan, Matthew & McQuinn, Kieran & O'Toole, Conor, 2019. "Assessing price sustainability in the Irish housing market: A county-level analysis," Research Notes RN20190401, Economic and Social Research Institute (ESRI).

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